Cosmen family agrees to take up National Express rights

Embattled transport group National Express signalled an improvement
in relations with its biggest shareholder today after it revealed 90.5
per cent of new shares were taken up in a £360million fundraising.

Spain's Cosmen family, which owns nearly 20 per cent of National Express, originally voiced opposition to the rights issue.

But
the Cosmens last week decided to take up their rights under the
fundraising and pump in the £74million needed to maintain their share.

Moving forward: The Cosmen family's decision to back the rights issue could signal a new era in relations with National Express

National was already guaranteed to receive the cash under the
fundraising, as it was fully underwritten and had been passed by
shareholders, albeit despite a third of votes going against the move.

RELATED ARTICLES

Share this article

But
the take up by the Cosmens may draw a line under a row that has further
destabilised National during a troubled time for the bus and rail firm.

The
group has been suffering on a number of fronts this year, surrendering
its loss-making East Coast franchise last month, fending off takeover
approaches and battling against union action.

It was told last month that its East Anglia rail franchise would finish three years early.

The
fundraising ends a period of uncertainty over National's balance sheet,
but the group is now facing an anxious wait over the appointment of a
new chief executive.

National is said to be keen to secure Tube
Lines boss Dean Finch having struggled to fill the chief executive post
after Richard Bowker resigned around five months ago.

Tube Lines
- a maintenance firm that serves part of the London Underground - is
reportedly making last ditch attempts to hold on to Mr Finch and has
now given him until next Monday to decide.

The top job at
National Express will be far from easy, with the group labouring under
a £1.1billion debt pile and threats over its rail franchises.

It
pulled out of merger talks with rival Stagecoach to press on with the
rights issue - a decision that sparked a row with the Cosmens, angered
at the hasty dismissal.

But National argued there was a risk that
a tie-up could not be completed by the end of the year, which would see
it face a breach of banking covenants and result in higher costs.

Deputy chairman Jorge Cosmen had declined to back the rights issue in boardroom voting amid the disagreement over strategy.

The
family - which had itself earlier pulled out of a proposed takeover
offer for National Express - had raised fears that National Express
'lacks strong management, a clear strategy and long term financial
security', according to details of the rights issue released earlier
this month.

National Express runs the East Anglia service and London commuter operation c2c, while it also has a large bus division.

Share or comment on this article:

Cosmen family agrees to take up rights in National Express fundraising